Samwise Quick Reference Handbook
To streamline our daily blogs and conserve space, we’ve organized key resources into a convenient, collapsible dropdown menu below. A sort of Quick Reference Handbook if you will -- as our friends in aviation might call it. By clicking the menu below, you’ll have qu...
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It reached the previous high as you predicted. Any idea if the devaluation of the dollar relative to foreign currencies might play a part in how far this run will go?
It could. But making those types of predictions on some specific issue are very difficult to do. There are just too many factors involved making those types of forecasts and there’s no way to establish any sort of very precise outlook based on that.
For example, there has always been a correlation between rising rates and pressure on the NASDAQ or falling rates and rallies. But there’s no way to determine how far that will take the market. Only that it either add or subtract demand.
If binary code is the thing that all programming languages can be reduced to, then supply and demand is the binary code of the market.
All issues that impact or help the market is simply a statement on the supply and demand of purchasers in equities.
It’s why we’re so focused on the bottom line i.e. the technical. Because the technicals brings all of that in.
A weakening dollar nearly always leads to increased foreign investment, which in turn fuels additional demand for risk assets across U.S. markets. The extent and degree to which this dynamic contributes to market upside, however, is inherently uncertain and difficult to quantify given the near endless reasons people have to buy or sell equities.
Unless one issue has some overwhelming impact on supply or demand — like tariffs back in Feb-April — I don’t tend to focus on any one issue. I certainly don’t make decision on that type of thing.
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Instead, what I do know is this. The market always returns to its highs. It almost always adds something like 3-10% on top of those highs depending on the circumstances. Rallies tend to last 60-days on average with the upper boundary near the 80-100 day mark. Almost all of the larger rallies have tended to last closer to that 80-100 day range. This is one such rally. We’re at new highs and are very likely to see a peak sometime in the next 6-weeks. At the point, people are likely to take profits as the market has risen 35% from its lows.
This is the bottom line binary code of the market^
Stark is keeping its NVDA 140 puts ?
We are probably closing those on the next correction.
For now. We still own 300 shares of NVDL. Once we’re out, we’ll probably close it. Or we may hold it and wait to close on a pull-back.
Hello Sam, Given the strength of NVIDIA’s rally, I was expecting a correction of $25 to $30 in the short term, particularly with the BRICS meeting on July 7th.
So short-term, what we’ve generally seen is different sized pull-backs. Typically no larger than $20. IN corrections, you get larger pullbacks.
But just standard oversold pull-back, the most we generally see is $20 from the absolute peak. See attached.
We need a correction to get something larger. If we see Nvidia pull back $30, it’s probably in a correction at that point.
So, if I understand this article and the previous ones correctly, in your opinion, in the short term, NVIDIA’s behavior would ultimately be:
1) Option 1
A $20 pullback followed by a parabolic rise and then a potential correction like in February 2025 before seeing a medium-term rise to $160-$170 by January 2026
2) Option 2
A $20 pullback followed by a potential short-term correction by August like in February 2025 before seeing a medium-term rise to $160-$170 by January 2026 I’m more specific about the short and medium term from now on ????. Thanks for your insights.
Best
Karl
Hi Sam,
Do you have a general watchlist of types of ways (e.g. double top, negative divergence) the market can top ahead of a correction? Do you run an analysis on the type of ways markets top in these type of environments and based decisions based on probabilities (even though technically anything can really happen)? More of a broad question, but maybe a relevant one given the circumstances.
Thanks!
Sam, Now that NVDA is the most valuable company in the world, some of the huge market weighted funds will be forced to buy more NVDA. I don’t know the exact timing, but I would assume it will be some time around the end of the month. In addition, some regular hedge funds who have been underperforming, that don’t own NVDA, will probably feel pressured to buy it, since it is now the most valuable stock. Could this cause NVDA to go up a little higher than it normally would, if funds weren’t forced to buy it?